Agri-services company Origin Enterprises to close Ukrainian business

As of the end of the financial year, pre-tax profit at Origin Enterprises stood at €81.69m with the company having a net cash position of €53.2 million.

Ireland-based agri-services business Origin Enterprises has announced that it will be closing its Ukrainian division at the end of this month amid the ongoing war in the country.

It comes as the company released its preliminary financial results for the financial year 2023 which shows revenue up 4.9% to €2.5bn but operating profit took a hit dropping from €119.7m in 2022 to nearly €90.8m.

The company said that excluding last year’s results, operating profit this year exceeded the previous best of the group with increases recorded in continental Europe and Latin America set against the expected reduced contribution from Ireland and the UK.

As of the end of the financial year, pre-tax profit stood at €81.69m with the company having a net cash position of €53.2m.

However, the company reported an underlying decrease in “agronomy services and crop input volumes”, primarily driven by a combination of reduced Ukraine activity and lower fertiliser volumes resulting in an 8.4% drop in this area.

Sean Coyle, chief executive of Origin Enterprises, said the company delivered “strong overall performance in declining commodity markets”.

Mr Coyle said the decision to leave Ukraine was made after “much deliberation” given the “reduced activity levels and the market dynamics over recent years which have resulted in the business being loss-making, with little evidence that the trading environment will improve”.

The company said it has in recent years undertaken a significant “de-risking of the balance sheet through a sustained focus on working capital reduction”.

Origin Enterprises said that the war in Ukraine is only the most recent challenge facing its businesses there, adding that a “volatile trading environment and challenging market dynamics have resulted in the business being loss-making over a number of years”.

It said that the Ireland and UK market delivered a good performance this year “reflective of a return to more normalised trading conditions as the year progressed”.